Data Collection Table for Assignments 2
Data Collection Table for Assignments 2
Category Amount/Value Frequency Possible Source
A: Property Details Asking price ($) Use the real estate websites provided on Moodle
Current rent ($) /meter-square Use market rent from real estate websites or report of property companies
Rent review (#) /year(s) 2-5 years for commercial property
Management fee (%) /yearUse 5%-7% of the Effective Gross Income (EGI)
Strata fee ($) /quarter Check for strata fee in the location of the subject property
Council rate ($) /quarter Check the local council website of the subject property
Water rate ($) /quarter Check from Sydney Water or similar company in other states
Capital expenditure ($) /year Use 10%-20% of the NOI or 1%-2% of the market value of the subject property
B: Market Information Rental growth (%) /year Check property report or calculate average of long-term price growth (use last 5 years)
Expense growth (%) /year Check property report or calculate average of long-term CPI (use last 5 years)
Vacancy rate (%) /year Check property report or other property research bodies
Current cap rate (%) Use the NOI in the first year and divide that by the asking price of the property
Capital growth (%) Use the long-term GDP growth rate (average real GDP growth in the last 5 years)
Discount rate (%) You can use current cap rate + capital growth rate OR risk free rate + risk premium
Terminal cap rate (%) Current cap rate plus 50 to 100 bps (it should be higher than the current cap rate)
C: Capital Outlays Purchase price ($) Use the value from Part A
Stamp duty ($) The formula will be provided in the DCF Excel file
Transfer fee ($) Do some research
Legal fee ($) Do some research
Total capital outlays ($) Purchase price + Stamp duty + Transfer fee + Legal fee
D: Others Selling expense @ 2% Usually 2% of the selling price
REST0004: Property Investment & Finance Term 1 2023
Assignment 2
Due Date: Friday 23rd April 2023
Individual Assignment Assignment assessment weighting: 60%
Assignment Topic
This is the second report in a series of two assignments and it is an investment analysis report of an income-producing property (office, retail, or industrial). If you choose an income-producing property in Assignment 1, you can continue with it in Assignment 2 if you wish.
You are assuming the role of a Property Investment Analyst and you are required to conduct an investment analysis report for an income-producing property in the major cities of the east coast of Australia. The subject property must be available in the market or recently sold (from June 2022 to date).
You are required to identify an income-producing property and obtain data and information for the property such as purchasing price, rent, rental growth, vacancy rate, incentives, outgoings including capital improvement, and net lettable area. You are expected to develop a discount rate and a discount cash flow for a ten-year period.
Tasks
You are required to conduct an investment analysis report for an income- producing property in the major cities of the east coast of Australia. Your Report needs to discuss and evaluate the following:
Provide a brief description of the subject property including its internal and external features.
Use the collected data and information to conduct a detailed investment analysis including a 10-year discounted cash flow (DCF), the Net Present Value (NPV), and the Internal Rate of Return (IRR).
Use the DCF in (b) to evaluate the impact of loan/leverage in the investment analysis, and to determine the optimal financial strategy.
Use the DCF in (b) and (c) to evaluate the financial risk of this investment.
Use the DCF in (b) to evaluate the impact of tax in the investment analysis.
Report Due Date: Friday 23rd April 2023 at 11:30PM
Content
Your presentation/report will need to include:
Proposal summary
Background of the subject property
Investment analysis including the NPV, IRR, optimal financing strategy, the financial risk, and the impact of tax on the NPV and IRR
Conclusions
Submission requirements
Your paper should be set out in an easy to read, conversational style.
You may use headings, bullet points, tables or charts to highlight points.
Sources should be referenced as per UNSW standards.
Written assignment on Microsoft Word Document and an Excel file with the DCF and other calculations must be submitted via the appropriate Turnitin link on Moodle.
Use Harvard referencing and citations. Minimum of 5 references in this submission.
Maximum word limit is 3,000 words excluding tables, graphs, appendices
A cover page has been provided (see following).
Assignments that do not include the standard university plagiarism declaration will not be marked until this is supplied
The University of New South Wales
School of the Built Environment
REST0004 T1 2023 Property Investment & Finance ASSIGNMENT 2 COVERSHEET
DUE DATE: FRIDAY 23rd April 2023
STUDENT CHECK LIST (please tick)
Coversheet
Plagiarism declaration
Submission uploaded into Moodle
STUDENT NAME AND NUMBER:
Item Mark Value
Executive summary 10%
Introduction of the subject property 5%
Investment analysis on property 30%
Investment analysis on equity (debt financing) and the optimal financing strategy 10%
Financial risk management 10%
The impact of taxation 10%
Conclusions 10%
Presentation and style 5%
Students present proposal clearly and
convincingly
5%
Use of tables, charts or data to present findings
5%
TOTAL MARK /100
Markers Comments (Optional):
1727207747017272077470
